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Old 02-25-2017, 11:52 AM
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Received 1098-C for LLC & the same under personal ss#

Hello,
The bank sent a 1099-c for the LLC and then the same under my husband's social for a credit card he opened under the business but under his name only. The debit was canceled under bankruptcy court chapter 7. The LLC is closed, since the bank sent the 1099-c under the tax id for the business and then one under my husband's how do I list these? Do I need to file a tax return for the LLC list the amount and carry it over to our personal taxes and include the 982 form since his bankruptcy was filed and granted in bankruptcy court? Also he had other credit cards that were discharged under bankruptcy but they haven't sent the 1099-c on those. Do I need to wait to file my taxes until I receive the other ones? Or does the form 982 have where I can list the amounts that were discharged in court?
Thanks for your help.
Ellie



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Old 02-26-2017, 02:43 AM
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The bank sent a 1099-c for the LLC and then the same under my husband's social for a credit card he opened under the business but under his name only. The debit was canceled under bankruptcy court chapter 7. The LLC is closed, since the bank sent the 1099-c under the tax id for the business and then one under my husband's how do I list these? =======>>In Chapter 7, the trustee liquidates or sells your assets and pays down as much of your debt as possible with the proceeds. When your bankruptcy discharges the debt, that debt ceases to exist. Therefore, when you file for bankruptcy and receive a discharge of the debt that the creditor eventually forgives and sends you a 1099-C for, the creditor technically has nothing to cancel because the debt is already gone. Your bankruptcy discharge supersedes the 1099-C and relieves you of responsibility for claiming the money as income. It doesn't happen automatically, however. You have to alert the IRS that you filed for bankruptcy, so the creditor actually had nothing to cancel. You can do this by filing IRS Form 982 with your tax return


Do I need to file a tax return for the LLC list the amount and carry it over to our personal taxes and include the 982 form since his bankruptcy was filed and granted in bankruptcy court? ==>As mentioned above; The timing of your bankruptcy is critical because a discharge only applies to debts ;you can't discharge income. If you file for bankruptcy after you receive a 1099-C, what you have at this juncture is income, not a debt that you want to get rid of. The debt went away when the creditor forgave it; at that point, it became income to you. Therefore, if you receive a 1099-C before you file for bankruptcy, your bankruptcy proceedings won't affect it and you must report the income on your tax return.

Also he had other credit cards that were discharged under bankruptcy but they haven't sent the 1099-c on those. Do I need to wait to file my taxes until I receive the other ones? Or does the form 982 have where I can list the amounts that were discharged in court==>I guess you do not have to worry about having to repay the debt that was wiped out in your bankruptcy case. Your creditors should receive notice of the discharge of your debt and not send you a 1099-C, but some creditors may still ignore the notices and send out a 1099-C anyway



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Old 02-26-2017, 09:10 AM
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1099-c received under business and personal ss#

Thank you for responding, this was a personal bankruptcy that was granted in August 2016 and the 1099-c reflects that date and was just received. So no need to file a business tax return and just file the personal with the 982? On the 982 do I only list the amount from the 1099-c that the bank listed? Also do I need to complete anything else on the 982 parts 2&3 ?
I really appreciate your help.



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Old 02-26-2017, 10:35 AM
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Originally Posted by Ellie R View Post
Thank you for responding, this was a personal bankruptcy that was granted in August 2016 and the 1099-c reflects that date and was just received. So no need to file a business tax return and just file the personal with the 982? On the 982 do I only list the amount from the 1099-c that the bank listed? Also do I need to complete anything else on the 982 parts 2&3 ?
I really appreciate your help.
Thank you for responding, this was a personal bankruptcy that was granted in August 2016 and the 1099-c reflects that date and was just received. So no need to file a business tax return and just file the personal with the 982? ========>No on 1040; The amount which is excluded from taxable income is not reported on your 1040 form.If you exclude only part of forgiven debt on form 982 , then I gues the rest is reported on line 21 form 1040 as other icnoem as part of youe AGI.however this is not your caseIf the full amount of forgiven debt is excluded , then, none is reported on form 1040 , but you need to attach form 982 to your tax return.The correct way to ensure that you do not have to pay taxes on any debt ?forgiven? in bankruptcy, and properly allocate any tax attributes, is to file IRS Form 982 for the tax year in which you received your bankruptcy discharge.

On the 982 do I only list the amount from the 1099-c that the bank listed? Also do I need to complete anything else on the 982 parts 2&3 ?========>>>>>>>> In the case of credit debt, you need to Check the box on line 1b if the discharge occurred when you were insolvent .Include on line 2 the amount of discharged nonbusiness debt that is excluded from gross income. If you were insolvent, You are insolvent when your total debts are more than the fair market value of your total assets., do not include more than the excess of your liabilities over the fair market value of your assets.you need to Include on line 10a the smallest of (a) the basis of your nondepreciable property, (b) the amount of the nonbusiness debt included on line 2, or (c) the excess of the aggregate bases of the property and the amount of money you held immediately after the discharge over your aggregate liabilities immediately after the discharge.



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Old 03-05-2017, 08:18 AM
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What about the LLC since the bank also sent a 1099C under the business tin? Do we need to file a tax return for the LLC with the K's and bring them over to the personal tax return? Then also include the 982 to show the debt was cancelled in bankruptcy. The schedule K if we need to file, should that be only under my husband since this was his debt? Also the LLC was closed 2016 and didn't make any money in 2016.
Thanks for your help.



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Old 03-05-2017, 12:20 PM
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Originally Posted by Ellie R View Post
What about the LLC since the bank also sent a 1099C under the business tin? Do we need to file a tax return for the LLC with the K's and bring them over to the personal tax return? Then also include the 982 to show the debt was cancelled in bankruptcy. The schedule K if we need to file, should that be only under my husband since this was his debt? Also the LLC was closed 2016 and didn't make any money in 2016.
Thanks for your help.
In general, an LLC that will be closing must report to the IRS that it will be dissolving and liquidating by filing Form 966. When filling out Form 966, the LLC must execute either a resolution or plan to dissolve. As part of the resolution or plan to dissolve, the LLC must set forth a detailed plan for dissolving LLC assets and paying LLC creditors. Furthermore, if the LLC is completely dissolving, it must indicate on Line 10 of Form 966 that the LLC is dissolving pursuant to Section 331; after electing to dissolve, the LLC must sell off any assets owned by the LLC to pay LLC creditors. If there are any proceeds remaining, they must be distributed to LLC members. The process of liquidation must be reported to the IRS on Form 8594. If any LLC assets are not sold and are instead exchanged for other assets, this asset exchange must be reported to the IRS on Form 4797.Please contact an Enrolled Agent or a cPA doing taxes in your local area for your fed/state returns



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Old 08-21-2017, 12:24 AM
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